Veeva "deepens partnership with Salesforce"; Open to interpretation?
Tom Paine
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(Some phrases from an earlier version were modified for increased clarity.)
Veeva Systems ( NYSE: VEEV ) built its initial platform, Veeva CRM, on top of Salesforce's Force.com.platform. It has since added several elements to what it calls its 'Commercial Cloud' (encompassing CRM) which are integrated with Veeva CRM. Veeva remains committed both contractually and strategically to Salesforce for a long time, the company assures me. (The current contract actually extends through 2025.)
The other side of Veeva's business, regulatory and clinical, which more than doubled in revenue in the last quarter and may in the not too distant future account for a majority of Veeva revenue, is built upon Veeva Vault, which is a completely proprietary Veeva platform.
There is no publicly known point of contention between Veeva and Salesforce, though the arrangement takes a big bite out of Veeva's margins. Veeva CEO Peter Gassner, who came out of Salesforce, knew the Force.com platform because he had a hand in developing it, and it suited Veeva's original purpose of getting up and running quickly with low fixed investment. It was a brilliant strategy. But the future of the Veeva-Salesforce relationship beyond Commercial Cloud seemed unclear to some outside observers. .
Meanwhile, Salesforce has used Veeva as Exhibit A in portraying the potential for building vertical market solutions on its platform. And Veeva was on the list of Salesforce's potential acquisition targets that was hacked and wikileaked late last year.
Yesterday, under the headline "Veeva Deepens Partnership With Salesforce, Announces New Product Integration ," Veeva announced new integration between Salesforce Marketing Cloud and Veeva CRM, as well as support for Salesforce Service Cloud with Veeva Vault.
Salesforce Chairman and CEO Mark Benioff was quoted as saying, “Veeva has been an outstanding partner over the past decade, and Peter has been an outstanding CEO. Our expanded collaboration is a great next step for our joint customers and we look forward to working with Veeva into the next decade to help move the life sciences industry forward.”
This could mean little, or it could be significant. The variable cost of an incremental SaaS subscription is minimal. I verified today with a Veeva spokesperson that the two Salesforce clouds will not be sold as add-ons to Veeva customers, they will just be available to them, and integrated with the Veeva clouds.
This availability is definitely a benefit to Veeva customers, though its not clear whether this is primarily economic, or ease of use through integration. Its also not clear to me what Salesforce has to gain economically, if it is virtually giving away the life sciences market for two very important clouds. Perhaps this should be seen in the overall context of the dynamics of the Salesforce-Veeva relationship. For Salesforce, it could be a "land and expand' strategy to ultimately position itself to sell other clouds (think Einstein, IoT, Health Cloud) into Life Sciences. But anyway, it leaves the door open for future collaboration between the two cloud companies.
Based in Pleasanton, CA, Veeva has significant market development resources in Radnor, as well as a large customer base in the region.
